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The AIG Effect Waning as Hotels Across South Florida
 Report Increases in Group Business

By Hannah Sampson, The Miami HeraldMcClatchy-Tribune Regional News

September 09, 2010 - --Slowly, and often at the last minute, the group hotel business that has been a mainstay of South Florida's visitor industry is creeping back.

But corporate meetings look a little less grand than they did in the pre-recession era. Gone are lengthy affairs packed with golf mornings, spa afternoons and lobster-and-champagne dinners. In their place: shorter meetings arranged with an eye toward cost-cutting and charitable activities to soften the image.

"We're finding that they're not necessarily as big or as flashy," said Michelle Shulman, public relations director at the Westin Diplomat Resort & Spa in Hollywood, where groups make up most of the business.

Hotels and event planners throughout the region say the same. Practicality, they say, is the new glitz.

Companies that threw extravagant shindigs suffered a black eye after top performers with American International Group gathered for a lavish event just days after the insurance giant was bailed out with public funds in 2008. That backlash -- coupled with the spiraling economy -- led to a dramatic downturn in conventions and meetings, especially in resort destinations like South Florida.

But the "AIG effect" is waning as hotels across South Florida report increases in group business -- a key element that gives hotels a base of booked rooms.

"It really couldn't go much lower than it did," said Scott Berman, a lodging analyst with PricewaterhouseCoopers in Miami of the recent dip in group business. "It certainly has rebounded. But it looks and feels a lot different than a couple years ago."

At the Fontainebleau Resort in Miami Beach, where groups make up 60 percent of visitors, the hotel has seen about a 25 percent increase in group business since last year and another 15 percent bump for 2011.

At Doral Golf Resort & Spa in west Miami-Dade, group business has increased by about 35 percent over 2009, said sales and marketing director Christopher Bielski -- though clients -- such as the Professional Insurance Agents of Florida, which recently met there -- tend to stay closer to home than before the meltdown.

Such downsizing is typical, say hotel sales directors. Instead of the yearlong advances of the past, business groups have booked months or even weeks before their meeting dates. Corporations often hold shorter gatherings with fewer people than before the economic tailspin.

The focus is more on business and less on extras. At the Harbor Beach Marriott Resort & Spa in Fort Lauderdale, the spa, shop, bar and restaurant have seen declines despite an increase in group bookings, said resident manager Manny Rappenecker.

Some even host some functions online instead of in person.

Such was the case with Connecticut-based Cengage Learning. Before the crisis, the company held two sales meetings a year with 1,500 employees at each. In December 2008, the company cut back to one annual event and offered training on new products via the Web.

Last year, Cengage added a new element to its annual meeting: philanthropy. During the company's annual meeting at the Fontainebleau in Miami Beach last month, 1,100 employees participated in an exercise-for-good session, raising a total of $100,000 through donations for two local charities, said David Gillespie, a company vice president.

Increasingly, other companies are weaving charity efforts into meeting time. Crump Life Insurance Services, which met in Miami Beach in May, encouraged attendees to pack clothes for earthquake victims in Haiti. At a New Orleans meeting, employees volunteered with Habitat for Humanity, said company president Brian Winikoff.

Corporations say they are driven by a desire to give back rather than earn good PR. Still, the fear of critical headlines has kept many groups from booking in hot party spots.

Even that concern is beginning to mellow, hotels and analysts say. Last year, a few groups canceled at the Key West Marriott Beachside Hotel because of its sun-and-fun location, said sales and marketing director Alan Beaubien. This year, with group business up 72 percent over 2009, no one has raised the perception issue -- though they are rearranging plans to book when prices are best.

But South Beach still carries too much baggage for some companies. Valerie Bihet, owner of event planning and destination management company The Vibe Agency, said she sends people to hotels in Miami or Coral Gables if they're uneasy about staying on the beach.

The 2010 Super Bowl last February in Sun Life Stadium helped boost a rebound, according to a report from hotel investment services firm Jones Lang LaSalle. In Broward County, a targeted effort by the Greater Fort Lauderdale Convention & Visitors Bureau has brought group business above boom time levels, said media relations director Jessica Taylor.

Large conventions and pharmaceutical company meetings in South Florida also offer promising signs of recovery. Miami-Dade hosted more than 19,000 people for the American Academy of Dermatology in March, a record for the group -- which already plans to return in 2013.

That's a story that Barry Moskowitz, vice president of sales for the Greater Miami Convention & Visitors Bureau, enjoys telling.

"Everyone wants success, and if they see other groups are meeting here with success, that obviously entices them to look at us more closely," he said. "It helps me bring more to the destination."

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To see more of The Miami Herald or to subscribe to the newspaper, go to http://www.herald.com.

Copyright (c) 2010, The Miami Herald

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